Anti-cherry picking limiting consumers in FTTN

Whether you like it or not, NBN Co’s business case benefits from the so called “anti-cherry picking” laws — or Telecommuncations Act 1997, Sect 141B to be exact. It basically gives monopoly provisions for NBN Co to build a “superfast carriage service” (basically an internet connection able to normally deliver 25Mbps or greater speeds) without competition from other carriers. This gives NBN Co the ability to cross-subsidise and create uniform pricing across Australia.

The fundamental problem with Section 141B in this new MTM network architecture being undertaken by the new NBN management is that consumers no longer have a choice of speeds. Australians covered by the FTTN/dp/B and HFC components of the “new” NBN network will only ever be able to get what NBN Co delivers to them.

The issue…

Just to illustrate the issue here… For argument’s sake, you’re sitting at the fringes of a copper Distribution Area (DA) and your service gets peak speeds of 25/5 Mbps thanks to NBN Co’s“innovative” Vectored VDSL2+ FTTN rollout. Now, say in 2017… the company you work for has migrated to a cloud-based computing system that would greatly benefit from having burst capacity of 100/40Mbps so the internet doesn’t congest significantly when you start working. The problem is — no other competing network builder can come along and build a faster (and cheaper, especially in metro areas) fibre network for you — no matter how much you pay. Even small businesses can not get access to alternative “superfast carriage service” other than that provided by NBN Co.

It works for an FTTP-dominated network

This framework was perfect under a universal and uniform fibre service that’s able to deliver services beyond the typical needs of a 2014-household. It keeps NBN Co’s monopoly and business case for cross-subsidy… and Australian residents and small businesses need not be worried by the restrictions of law on their ability to upgrade to higher and more reliable speeds since the GPON specification is future-proof with a backward-compatible XGPON upgrade path already available.

Just not FTTN…

But clearly, this does not work in an FTTN-dominated NBN. All residential and small businesses are legislatively bound in what their internet connection speeds achieve, that is, you will get at best what NBN Co is able to provide (a best-effort 25/5Mbps service). And if you think about it in the context of 2017 and beyond, that’s not a lot.

But without the current laws, NBN Co can’t possibly have a profitable business case. Its cross-subsidy plan for the rural fixed-line, fixed wireless and satellite services would crumble.

It’s a tough gig, but a self-inflicted gig

The Minister for Communications, Malcolm Turnbull, has a tough weight to balance. With the economical viability of NBN Co to struggle with, the party ideology of a free market and a self-imposed ideology of an FTTN network — one would wonder why we didn’t just stick with FTTP…

Disclaimer: this is based on my understanding of the Telecommunications Act 1997, Section 141B. Feel free to correct me if you believe what I’m asserting is incorrect — politely of course 😉

I'm the author of jxeeno™ blog and co-founder of HSCninja.com. I'm a bit of an #NBN and public transport geek. You can normally find me juggling work and my studies at UNSW where I'm currently completing a degree in Geospatial Engineering.